The Private Practice eZine Spring 2013 Page 19

The Private Practice

Spring 2013

ALTERNATE INSURANCES

The following two forms of insurance
are commonly overlooked:
Public Liability Insurance
Many practitioners mistakenly believe
their medical indemnity policy will
cover public liability claims. For
example, several years ago a specialist
who operated in a private hospital
as a VMO accidently caused bodily
injury to a nurse during an operation.
The employed hospital nurse lodged a
workers' compensation claim and the
workers' compensation insurer then
`subrogated' against the specialist
seeking to recover their costs.

The specialist discovered the

matter was not covered by their
medical indemnity policy, as it was a
public liability matter. The specialist
did not have public liability cover,
which he or she could have easily
purchased (a $10 million policy for
a single doctor would be less than
$500 annually).

Be aware that public liability

insurance is often a requirement in
contracts such as in lease agreements,
independent service contracts or
VMO contracts. Check any contracts
you have entered into (there is
normally a section titled `Insurance
Requirements'). Better still, send the
contract to your insurance broker to
review the insurance requirements

and indemnities sections.
Management Liability
Management liability is another
overlooked policy and is made up of a
package of covers that include cover for:
· DirectorsandOfficersLiability

(and Organisational Liability)

· EmploymentPracticesLiability

(eg. An allegation of unfair
dismissal or discrimination)

· Crime(theftbyemployees)
· StatutoryLiability(fines

and penalties)

· InternetLiability(operating

a website)

· Kidnap,Ransom&Extortion

(including cyber extortion)

· TaxAuditandarange

of other covers.

The policy is designed to protect

both the company and the directors
andofficers(e.g.themanagement
team) against liability as a result of
a `Wrongful Act', committed while
carrying out the duties of directors
andofficers.Claimscanbebrought
from many sources, such as regulators
(e.g. ACCC, ASIC, ATO), employees,
competitors, customers/suppliers and
shareholders, particularly minority
shareholders.

An allegation may be completely

without merit, but without cover you
leave yourself exposed to expensive

and time-consuming litigation to
successfully defend any allegation.

For a medical practice with gross

turnover between $1-3 million
annually, expect to pay circa $1700
total premium for a $1 million main
policy limit (or circa $2100 for a $2
million policy).

There is often some overlap

between management liability and
other insurances you may hold. For
example, some medical indemnity
insurers provide cover for disputes
with employees (such as an unfair
dismissal allegation), but generally if
cover is provided, it is limited to legal
costs only (not the compensation
awarded), and the employing entity
must be wholly owned by you which
obviously would not be the case in
a group practice owned by multiple
doctors. A management liability policy
fills in these cover gaps.

Medical and General Risk Solutions is a Corporate Authorised Representative of Insurance Advisernet Australia
Pty Limited, Australian Financial Services Licence No 240549, ABN 15 003 886 687. Authorised Representative
No 436893. Chris Mariani, Authorised Representative No 434578. The information provided in this article is of
a general nature and does not take into account your objectives, financial situation or needs. Please refer to the
relevant Product Disclosure Statement before purchasing any insurance product.
If you have any questions or would like to arrange an obligation-free discussion and review, contact Chris Mariani
on 02 9905 7005 or 0419 017 011, email chris@mgrs.com.au or visit

www.mgrs.com.au